Thursday, July 12, 2012

Groups...Oh Groups

After my final CHESS run, I kept on trying to figure out how my final week just bottomed out and dropped my average weekly profit below $70,000. When Kathleen and I sat down and did the transient displacement calculations (fancy name for deciding if it's a good idea to accept a certain group or not.) After plugging all the data into our spreadsheet and found that we missed out on $14,000 of pure revenue. The was a group, Ford Motor Co., that asked to for 100 rooms for $70 from Tuesday to Thursday. When I saw this request, I immediately declined the request because I didn't want to sacrifice 100 rooms at $70 per room on a Tuesday when I could sell out without selling any rooms for $70.

That Tuesday, my hotel did well, but the following Wednesday and Thursday were dismal and I could have really used the extra 100 rooms because I ended up with over 120 empty rooms that weren't making me any money. Had I accepted the Ford Motors request, my group would have been extremely close to reaching the weekly goal of $70,000 profit. It would have been so close that if I sold just a few more rooms on random days, my hotel would have surpassed the goal of $70,000.

The funny thing is that when I first started, I didn't want to accept any groups because I didn't think the idea of giving away rooms would be profitable. When I made the change to accept as many groups as I could, as long as they didn't stay on my high transient demand days, I made a concious effort to analyze each offer, but on the final request, my decision was influenced by my original strategy.

It's agonizing to know that I was so close to reaching my goal and fell short on the last week of the simulation, but at the same time, it's cool to know that I came so close to reaching the goal using my own strategies that had to evolve after each trial run. I made the changes I thought I needed to make and I can rest assured that it was the hours spent combing through previous performance details that led me to developing my current expense setting strategy.

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